The Economist in Tort Litigation

Abstract

In recent decades, the involvement of economists as consultants and expert witnesses in civil tort actions has grown rapidly. In this article, the authors discuss the reasons for this phenomenon and the extent to conflicts of interest to arise in the practice of what is frequently called 'forensic economics.' They argue that, although conflict-of-interest pressures exist, the limited evidence does not indicate that unethical practices are rampant within the profession. Moreover, market correctives, judicial screening, codes of ethical behavior, and the dissemination of knowledge concerning proper forensic practice help to serve as (arguably imperfect) safeguards against unethical practice.

Loss of Earnings Following Personal Injury: Do the Courts Adequately Compensate Injured Parties?

“…; and what is the appropriate rate of interest at which future earnings should be discounted to enable a lump sum award to be made? See, for example, Bonham and La Croix (1992); Martin (1999); Slesinger (1991); Thornton and Ward (1999). Notwithstanding the general agreement regarding the underlying principles, there is, considerable variation in the methodologies and data used.…”

“…Notwithstanding the general agreement regarding the underlying principles, there is, considerable variation in the methodologies and data used. Brookshire and Slesnick (1997), Martin (1999) and Thornton and Ward (1999) provide details of the different approaches adopted 4 . These differences primarily reflect differences in the way the key economic variables, earnings growth, expected working life and the discount rate, are measured and often reflect different precedents established in each state 5…”

“…Finally, since awards are made as a lump sum payment it is necessary to discount the predicted earnings stream. The choice of discount rate is as contentious as the other components of the loss of earnings calculation and is the one most often disputed in US courts (Anderson and Roberts, 1989; Martin, 1999; Thornton and Ward, 1999). Differences in discount rates allowed by US courts in seemingly similar cases have produced substantial differences in awards for loss of earnings (Anderson and Roberts, 1989; Thornton and Ward, 1999).…”

Does Economics Have an Effect? Towards an Economics of Economics

“…The rapid growth of forensic economics 7 started with the wave of takeovers or mergers of firms, as well as with the policy of deregulation and privatization in the public sector. A "bias" in economic advice in litigation can be expected when economic experts are remunerated according to success in court (Thornton and Ward 1999). But there are clear limits to this tendency, (Posner 1999) so long as the market acknowledges professional competence and impartiality.…”

Truth-Bonding and Other Truth-Revealing Mechanisms for Courts

“…Solomon's mechanism is not strategy proof because the false mother who understood the mechanism refuse to tug on the baby just like the true mother. 38 (Mandel 1999;Posner 1999;Thornton and Ward 1999). 39 (Aycock 1993;Kainen 1992;Note 1976) 40 (Note 1976;Shellenberger 1988).…”